Material Flow and Pull Systems – How to Eliminate Material Handling Chaos (And Cut Lead Times in Half)

Your operators spend 30% of their shift walking around looking for materials.

Your material handlers log 5 miles a day running between the warehouse and the production floor, responding to “urgent” requests.

Materials sit in your warehouse, but you’re still having stockouts at the cells. Somehow you have too much inventory AND not enough at the same time.

Production stops multiple times per day waiting for materials. “Where’s the sheet stock for Job #4521?” “We’re out of M10 bolts at Cell 3.” “Can someone find the fixture for Product B?”

Your material handling system is killing your productivity.

You’ve optimized changeover. You’ve designed flowing cells. You’ve implemented mixed-model scheduling.

But if materials aren’t where they need to be, when they need to be, nothing flows.

The answer is pull systems – letting consumption drive replenishment instead of forecasts and chaos.

This article will show you how.

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The Material Handling Problem

Here’s what’s happening in most high-mix facilities:

Materials arrive at receiving:

• Unpacked and inspected
• Moved to central warehouse
• Organized by part number (seems logical, right?)
• Sits there until someone needs it

Production needs materials:

• Work order says “Make 100 of Product A”
• Material handler gets pick list from planner
• Walks to warehouse (5 minutes)
• Searches for parts (15 minutes)
• Loads cart and delivers to floor (10 minutes)
• 30 minutes per trip, multiple trips per day

The result:

• Material handlers spend 60-80% of their time walking and searching
• Production stops waiting for materials
• “Urgent” material runs disrupt everything
• Inventory everywhere but still shortages
• Chaos

The hidden cost: Material handling represents 40-50% of total lead time in most HMLV operations.

You’re not slow at making things. You’re slow at getting materials to where they’re needed.

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Push vs. Pull: The Fundamental Difference

Traditional material systems use push:

• Forecast says you need 500 widgets
• MRP generates pick lists
• Materials pushed to production floor
• Whether you’re ready or not
• Whether you actually need 500 or not

Push creates problems:

• Wrong materials arrive (forecast was wrong)
• Too much of some things (sitting around as WIP)
• Not enough of others (somehow still stockouts)
• Large batch deliveries (contradicts your small-batch production)
• Disconnected from actual consumption

Pull systems work differently:

• Materials delivered based on actual consumption
• When something is used, signal triggers replenishment
• Small batches, frequent replenishment
• Automatic, visual, simple

Analogy:

• Push = Going grocery shopping once a month, buying everything the store suggests. Most spoils. You still run out of milk.
• Pull = Small fridge with slots for basics. When milk slot empty, delivery service automatically brings one gallon. Never run out, never have excess.

Pull handles variability better – which matters enormously in high-mix environments where demand changes daily.

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What Pull Systems Look Like in Practice

The Basic Mechanism: Two-Bin Kanban

The simplest pull system:

Setup:

• Two bins of the same part at the cell
• Bin 1 (active): Operators use from this bin
• Bin 2 (reserve): Full, waiting

How it works:

• When Bin 1 empties, operator moves Bin 2 to active position
• Takes kanban card from empty Bin 1
• Places card on replenishment board (signals material handler)
• Material handler refills Bin 1 and returns it
• Cycle repeats

That’s it. Self-regulating, visual, no computer system needed.

Bin sizing:

• Calculate: (Daily consumption × Lead time to replenish) × Safety factor
• Example: Use 50 bolts/day, 2-day replenishment lead time, 50% safety factor
• Bin size: 50 × 2 × 1.5 = 150 bolts per bin
• Two bins = 300 total at cell

Supermarkets: Organized Buffer Storage

Think of a grocery store:

• Products organized on shelves (easy to find)
• Each product has designated location
• Minimum stock levels maintained
• Store restocks based on what customers buy

Manufacturing supermarkets work the same way:

• Materials stored in defined locations between processes
• Each part has min/max levels
• Downstream cell pulls what it needs (like customer shopping)
• Consumption triggers replenishment

Why supermarkets work:

• Buffer absorbs rate differences (upstream and downstream run at different speeds)
• Selection (downstream chooses what it needs when)
• Control (defined inventory levels, not unlimited)
• Visual management (can see inventory at a glance)

Water Strider Routes: Fixed Material Delivery

Traditional material handling:

• Material handler waits for requests
• “Cell 3 needs this. Cell 1 needs that.”
• Running around fighting fires
• Unpredictable, chaotic

Water strider routes:

• Material handler follows fixed route
• Same path, same stops, same schedule
• Every 2-4 hours (depending on consumption)
• Predictable, smooth

Example route:

Benefits:

• Predictable for cells (“Material handler comes every 2 hours, I can count on it”)
• Efficient for handler (optimized route, no backtracking)
• Prevents stockouts (regular replenishment before running out)
• Reduces walking (strategic path vs. random firefighting)

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Real Example: Machine Shop Transformation

Company: CNC machining shop
Products: 200+ SKUs
Challenge: Constant material shortages, operators spending 30% of time hunting for materials

Before: Centralized Warehouse Push System

Material system:

• Central warehouse (raw materials)
• MRP generates pick lists
• Material handler picks for each work order
• Delivers to machines in batches

Performance:

• Material handler: Walking 5+ miles per day
• Operator interruptions: 30% of time (looking for materials)
• Stockouts: 8-10 per week
• Raw material inventory: $400K (but still shortages)

The problem: Materials in warehouse, but not at machines when needed.

Pull System Implementation

Phase 1: Runner-Repeater-Stranger Analysis

Categorized 200+ SKUs:

• Runners (15 SKUs): 60% of usage, standard sizes used weekly
• Repeaters (45 SKUs): 30% of usage, standard sizes used monthly
• Strangers (140+ SKUs): 10% of usage, custom sizes rarely repeated

Different strategies:

• Runners: Point-of-use supermarkets with two-bin kanban
• Repeaters: Weekly delivery to cells
• Strangers: Pull from central warehouse as needed (low volume doesn’t justify kanban)

Phase 2: Point-of-Use Supermarkets

Created small supermarkets at each machining cell:

• 200 sq ft per cell
• Stocked 15 runner materials (common bar stock sizes)
• Two-bin kanban system
• Bins sized for 3-5 days usage

Example:

• 2″ aluminum bar stock
• Daily usage: 10 feet
• Replenishment lead time: 2 days
• Safety factor: 1.5
• Bin size: 10 × 2 × 1.5 = 30 feet per bin
• Two bins (60 feet total at cell)

Phase 3: Water Strider Routes

Created fixed delivery routes:

Route A (every 2 hours): High-consumption cells (1, 4) Route B (every 4 hours): Medium-consumption cells (2, 5) Route C (twice per day): Low-consumption cells (3, 6)

On each route:

• Material handler checks kanban boards
• Delivers full bins
• Picks up empty bins and kanban cards
• Returns to warehouse, refills, repeats

Results (After 3 Months)

Performance:

• Operator material interruptions: 30% → 5% of time (85% reduction!)
• Material handler walking: 5 miles/day → 2 miles/day (60% reduction)
• Stockouts: 8-10 per week → 1-2 per week (85% reduction)
• Raw material inventory: $400K → $250K (38% reduction, better organized)
• Lead time: 3 weeks → 1.5 weeks (50% reduction – flow improved dramatically)

Operational improvements:

• Operators stay at machines (material comes to them)
• Material handler has predictable schedule (less chaos)
• Inventory visible (can see what’s low at a glance)
• System self-regulating (automatic replenishment)

Investment:

• Shelving/bins/labels: $8,000
• Implementation time: 3 months
• No additional headcount

ROI:

• Labor productivity: $120,000/year (operators producing instead of searching)
• Inventory reduction: $150,000 freed up (working capital)
• Reduced downtime: $80,000/year (fewer stockouts)
• Total annual benefit: $350,000
• Payback: 1 week

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How to Implement Pull Systems (Step-by-Step)

Step 1: Analyze Your Materials

Categorize by usage pattern:

Runners (20% of SKUs, 70% of usage):

• Ordered frequently (daily/weekly)
• High volume
• Predictable demand
• Strategy: Two-bin kanban at point of use

Repeaters (30% of SKUs, 25% of usage):

• Ordered regularly (monthly)
• Medium volume
• Somewhat predictable
• Strategy: Small supermarket or scheduled delivery

Strangers (50% of SKUs, 5% of usage):

• Ordered rarely
• Low volume
• Unpredictable
• Strategy: Keep in central warehouse, pull as needed

Start with runners (biggest impact, simplest to implement)

Step 2: Calculate Kanban Quantities

Formula: Kanban quantity = (Average consumption × Replenishment lead time) + Safety stock

Example:

• M10 bolts
• Daily usage: 40 bolts
• Replenishment lead time: 3 days (supplier delivers weekly)
• Safety stock: 20 bolts (50% of daily usage)
• Kanban quantity: (40 × 3) + 20 = 140 bolts per bin
• Use 2 bins (280 total)

Step 3: Create Physical Supermarkets

At each cell:

• Shelving or racks near point of use (not central warehouse)
• Organized by part number
• Clearly labeled (part number, description, quantity, picture)
• Accessible (easy to see, easy to reach)

Space required: 50-200 sq ft per cell typical

Step 4: Design Water Strider Routes

For high-consumption cells:

• Route every 2 hours
• Material handler checks kanban boards
• Delivers replenishment
• Picks up empties

For lower-consumption cells:

• Route every 4 hours or twice daily
• Same process, less frequent

Create route map and schedule (posted where material handler can see)

Step 5: Train and Launch

Train operators:

• How two-bin system works (simple!)
• When to place kanban cards (bin empty)
• Don’t hoard materials
• 30-minute training session

Train material handler:

• Route schedule and procedures
• How to read kanban cards
• Standard work for each route
• 1-2 hours training, then on-the-job practice

Launch:

• Start with full bins
• Operate system
• Monitor closely first 2 weeks
• Adjust as needed

Step 6: Measure and Improve

Track:

• Stockouts per week (target: <2)
• Material handler route adherence (target: 95% on-time)
• Inventory levels (should decrease over time)
• Operator satisfaction (less frustration)

Continuous improvement:

• After 2-3 months, challenge yourself to reduce bin sizes 10-20%
• Improve replenishment speed
• Expand to more materials

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Kitting vs. Line-Side Inventory: When to Use Each

You have two fundamental choices for material presentation.

Kitting: Pre-Packaged for Each Work Order

How it works:

• All materials for one specific work order packaged together
• Delivered as complete kit
• Operator uses kit, returns empty

When to use kitting:

• High-complexity assemblies (100+ parts per product)
• Engineer-to-order products (every order is different)
• Limited space at cell (can’t stock everything)
• Tight material control needed (expensive or serialized parts)

Trade-offs:

• Benefit: High accuracy, verification during kitting
• Drawback: Labor-intensive, adds lead time, not flexible

Line-Side Inventory: Supermarkets at Cells

How it works:

• Materials stored at cell in supermarket
• Operators pull what’s needed for each product
• Water strider routes replenish regularly

When to use line-side:

• Mixed-model production (frequent product changes)
• Standard products with stable BOMs
• Simple to moderate complexity (under 30-50 parts)
• Space available for supermarket

Trade-offs:

• Benefit: Flexible, fast response, supports mixed-model
• Drawback: Requires more space at cell, operators must select correctly

Hybrid Approach (Often Best)

Kit the custom, stock the common:

Example:

• Kit: Custom parts specific to order
• Line-side: Standard hardware, common components
• Operator uses both (kit for custom items, supermarket for standard items)

Best of both worlds.

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Getting Suppliers on Pull Systems

Pull systems work best when extended upstream to suppliers.

Traditional Supplier Relationship

How it works:

• You send purchase orders (weekly or monthly)
• Supplier delivers on their schedule
• You receive large batches
• Sits in warehouse until needed

Problems:

• Large batches (ties up inventory)
• Infrequent deliveries (must hold more inventory)
• Disconnected from actual consumption

Supplier Pull (Kanban with Suppliers)

How it works:

• Send kanban signals to supplier when you consume
• Supplier delivers to replenish
• Small batches, frequent deliveries
• Tied to actual consumption

Benefits:

• Lower inventory (smaller, more frequent deliveries)
• Faster response (supplier sees demand in real-time)
• Stronger partnership (collaborative vs. adversarial)

Example:

• Part: Stamped steel brackets
• Container: 100 pieces
• You have 4 containers (400 pieces total = 2 weeks supply)
• When container empties, kanban card emailed to supplier
• Supplier produces 100 pieces, ships with card
• Cycle repeats

Start with local suppliers, high-volume parts (easiest to implement, biggest impact)

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The Business Case

Pull systems reduce inventory. But are they worth the effort?

Typical Benefits

Inventory reduction:

• Before: $500,000 average inventory
• After: $250,000 average inventory (50% reduction)
• Working capital freed: $250,000

Carrying cost savings:

• Annual carrying cost rate: 25% typical
• Savings: $250,000 × 0.25 = $62,500/year

Stockout reduction:

• Fewer production stops
• Less expediting
• Value: $40,000-80,000/year typical

Labor productivity:

• Operators spend more time producing (less time searching)
• Material handlers more efficient (routes vs. firefighting)
• Value: $50,000-150,000/year typical

Lead time reduction:

• Materials flow smoothly
• Typical: 30-50% lead time reduction
• Enables revenue growth (win business competitors can’t serve)

Implementation Costs

One-time:

• Bins, labels, shelving: $10,000-20,000
• Training: $5,000-10,000
• Implementation time: 3-6 months
• Total: $15,000-30,000

Ongoing:

• Kanban management: Minimal (part of material handler duties)
• System maintenance: $2,000-5,000/year

ROI Example

Manufacturing facility:

Benefits (annual):

• Inventory carrying cost savings: $62,500
• Reduced stockouts: $50,000
• Labor productivity: $80,000
• Total: $192,500/year

Costs:

• Implementation (one-time): $20,000
• Ongoing: $3,000/year

First year:

• Benefit: $192,500
• Cost: $20,000 + $3,000 = $23,000
• Net: $169,500

Plus: $250,000 working capital freed up

Typical payback: 2-6 weeks

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Common Mistakes to Avoid

Mistake #1: Trying to pull everything at once

Start with runners (20% of parts, 70% of usage). Prove it works. Then expand.

Mistake #2: Calculating kanban quantities once and forgetting

Demand changes. Review kanban quantities quarterly. Adjust as needed.

Mistake #3: No discipline on material handler routes

Routes work only if they’re protected. Don’t pull material handlers for ad-hoc tasks during route time.

Mistake #4: Poor labeling and organization

If bins look the same and labels are unclear, operators will grab wrong materials. Invest in good labeling.

Mistake #5: Not training operators properly

Operators must understand why the system matters and how to use it. 30-minute training pays dividends.

Mistake #6: Implementing pull without fixing changeover first

Pull systems enable small batches. But if changeover takes 3 hours, you can’t run small batches. Do SMED first.

Mistake #7: No visual management

If status isn’t visible (kanban boards, route schedules, metrics), the system will drift. Make everything visible.

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Your Next Step

Pick 10-15 high-volume materials that your cells use regularly. The ones where you’re constantly running out or searching.

Implement basic two-bin kanban for those materials:

1. Calculate bin sizes (consumption × lead time + safety stock)
2. Get bins and labels
3. Set up point-of-use supermarkets at cells
4. Train operators (30 minutes)
5. Create basic water strider route (material handler checks and replenishes)

Most companies see significant results in 4-8 weeks from starting their first pull system.

The hardest part isn’t the mechanics – bins and cards are simple. The hardest part is the discipline – following routes, placing kanban cards, sustaining the system.

If you want someone to guide you through this, that’s exactly what I do. I specialize in high-mix/low-volume manufacturing where material flow is the difference between chaos and smooth operations.

My approach is hands-on. We don’t spend months analyzing. We implement quickly – start with runners, prove it works, expand systematically. Fast results that stick.

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Want to go deeper?

This article covers the basics, but my Material Flow & Pull Systems: Kanban, Supermarkets, and Water Strider Routes for High-Mix, Low-Volume Manufacturing walks you through the complete implementation. [Get your copy on Amazon →]

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Four ways I can help:

Remote Coaching Package – 10 hours of coaching with unlimited email support for specific challenges – $3,700.

Weekend Warrior Events – Focused 2-day on-site sessions for breakthrough results on a specific problem. Perfect for facilities that cannot afford to shut down production during the week – $9,500 (+ Travel).

Week-Long Kaizen Events – Complete system transformation in 5 days. We go from “current state” to “future state” in one week -$18,500 (+ Travel).

Full Consulting Projects – Month-long (or longer) intensive engagements for facility-wide transformation.

[BOOK FREE 30-MINUTE CONSULTATION] or [Download my Free 491-page Manaul] for the complete methodlogy.

The companies dominating high-mix markets aren’t the ones with the newest equipment or the biggest warehouses. They’re the ones who’ve figured out how to move materials efficiently.

Pull systems with kanban and water strider routes are how you do that.